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Help to Buy Scotland – the facts brokers need to know

The new Help to Buy (Scotland) Affordable New Build scheme opened for applications on 1st March 2016 and many brokers were understandably curious about the scheme at FSE Glasgow last month. With brokers keen to find out more about the ins and outs of the scheme, we have put together some of the facts that intermediaries need to know when advising Scottish customers who are interested in Help to Buy.

Who is eligible?

Both first time buyers and existing homeowners are eligible for Help to Buy Scotland, providing their new home will be their only residence and they don’t own or part own a share in another property.

How does it work?

The scheme is designed to help buyers with up to 15% of the purchase price of a new build home. A buyer will be expected to save a deposit of around 5%, with the mortgage and deposit combined covering a minimum of 85%. The mortgage must be a repayment mortgage from a qualifying lender.

What homes are eligible?

The home must be a new build from a housebuilder who has been approved to participate in the scheme, a full list of which can be seen here. The maximum threshold price of eligible properties is £230,000 for purchases completing up to and including 31 March 2017, but this will change each financial year so make sure you keep up to date on what these are.

What is the process?

Interested parties will need to contact a participating housebuilder in the first instance, to see if there are any available properties through the scheme that suit their needs. They will then need to speak to an intermediary, financial adviser or participating mortgage lender before contacting one of the agents administering the scheme to apply, a list of which you can find here. If they are successful, they will receive an ‘Authority to Proceed’ form from one of these agents, confirming that their application is eligible for the scheme, and that they can proceed with a full mortgage application.

Is there anything else purchasers should be aware of?

As the scheme is designed to help people move onto or up the property ladder, homeowners will not usually be granted permission to improve or extend their property. Purchasers should also be aware that they have the option to purchase additional equity in their home or to repay the equity support based on the sale price when they sell.

Purchasers should also be aware that the Help to Buy (Scotland) Affordable New Build scheme is demand led and once the budget is fully allocated applications will close, meaning that interested parties should apply sooner rather than later.

Leeds Building Society is one of the few lenders* to offer Help to Buy Scotland mortgages. To speak to one of our team and to find out more about Help to Buy Scotland call 03450 50 5555.

This website is for use by FCA authorised intermediaries only. If you are not an FCA authorised intermediary and would like further information about our products or services, please visit www.leedsbuildingsociety.co.uk. If you are an FCA authorised intermediary and you reproduce any of the information on this website to be used with or to advise customers, then you must ensure that it complies with the Financial Conduct Authority's rules and guidance on financial promotions.

Leeds Building Society is a member of the Building Societies Association.

Leeds Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority. Leeds Building Society is registered on the Financial Services Register under number 164992. You can check this on the FCA website at www.fca.org.uk/firms/systems-reporting/register or by calling 0800 111 6768. Buy to Let mortgages which are for business purposes are exempt from FCA Rules.